Coronavirus: Victorian retail sales fell in July, even as national recovery rolled on

Victoria’s retail slump in July was not enough to derail a third straight month of solid gains in national retail spending.

The Victorian second wave of COVID-19 cases gave a knock to the retail recovery of May and June.

National retail spending jumped to a record high last month as stay-at-home Australians continued to splurge on furniture and whitegoods.

Victoria was the only area to record a drop in overall sales as it suffered through the onset of a second wave of COVID-19 cases.

Retail turnover lifted by a solid 3.3 per cent last month to $30.8bn, according to preliminary and seasonally adjusted figures from the Australian Bureau of Statistics. That followed a 2.7 per cent gain in the previous month and May’s extraordinary 17 per cent bounce in the ­immediate wake of the first ­national lockdown in late March and April.

Monthly retail turnover in July was a remarkable 12.2 per cent more than a year earlier.

In contrast, retail turnover in Victoria fell 2 per cent in July, the ABS said, reflecting the hit to confidence from the re-emergence of the virus and renewed restrictions.

ABS director Ben James said the rise across the rest of the country was driven by continued strength in household goods ­retailing, and the continued ­recovery in cafes, restaurants and takeaway food services, alongside higher spending on clothing and footwear.

As Australians continued to adjust to spending more time at home, and working outside the office, household goods turnover was a massive 30 per cent higher last month than a year earlier.

Increased sales of larger items, including furniture and whitegoods, were standouts.

Australians continued to spend significantly more on groceries, with supermarket scanner data showing turnover in perishable and non-perishable goods up 14-15 per cent in July versus a year earlier.

There was also evidence of stockpiling in Victoria, where spending on perishable supermarket products up by 25 per cent against a year earlier, and on non-perishable items by 23 per cent – the largest increases in the country.

Australian Retailers Association chief executive Paul Zahra said the extraordinary income boost from major COVID-19 stimulus measures, such as the JobKeeper wage subsidy program and the boosted JobSeeker dole payment, had been underwriting the continued strength for the sector as a whole.

Mr Zahra warned that the booming turnover figures hid clear “winners and losers” during the pandemic, with fashion ­retailers in particular continuing to struggle.

He said August was likely to be a much weaker period for many retailers, particularly those in Melbourne as the city entered a hard lockdown.

Fears that Victoria’s second wave would spill over into neighbouring states also drove a large deterioration in consumer confidence across the east coast of Australia in August, according to a Westpac consumer sentiment survey released earlier this month.

More timely bank-card spending figures have also pointed to a marked slowdown in spending this month.

“The short term doesn’t look so great for retailers as the government stimulus tapers (from October),” Mr Zahra said. “But longer term I think the industry is in good shape, as the pandemic has accelerated the trend to online by at least a decade.”